Investors Seek Clarity on Banks’ Green Finance

ESG Investor

HSBC AGM sparks controversy as ShareAction flags continued lack of targets and transparency over sector’s sustainability claims.

NGO ShareAction has declared it will continue to aid investors in their push for transparency into HSBC’s green finance investment pledge, highlighting endemic issues across the banking sector.

The decision followed the HSBC’s most recent AGM, at which a coalition of shareholders requested the bank explicitly set out how it intends to use the money it has earmarked for sustainable finance and establish a renewable energy funding target. HSBC has previously said it would target between US$750 billion and US$1 trillion by 2030.

The 16-strong investor group that asked the question during HSBC’s AGM represents US$892 billion in assets, including the likes Ethos Foundation, Epworth Investment Management, Royal London Asset Management, and Sweden’s Folksam pension fund. Following the meeting, HSBC agreed to meet with ShareAction and investors to discuss its green finance strategy before the 2025 AGM.

Jeanne Martin, Head of Banking Programme at ShareAction, told ESG Investor that the news was “broadly very positive” as it showed the bank’s willingness to consider investor expectations and demands on green finance.

“What we’d like to achieve is a bit more of a conversation, and really clarify what we’re after by providing context to our requests,” she added. “We also want the bank to hear from shareholders directly. It’s one thing to hear from ShareAction, but it’s another to really get confirmation that they care about this issue and want to see the bank move on green finance.”

By the end of the 2024 AGM season, ShareAction will have asked a total 24 questions at the AGMs of 17 European banks this year, including eight specifically focused on green finance. The advocacy has indicated its intention to attend the upcoming AGMs of BNP Paribas (14 May), Crédit Agricole and Société Générale (22 May).

Industry-wide issue

Last November, research from ShareAction found that Europe’s top 20 banks – including HSBC – successfully promoted their green finance credentials, but lacked transparency on green finance activity, leaving them and their investors exposed to greenwashing allegations.

“As investors, we are looking for as much transparency as possible from our portfolio companies, [and] clearly defined targets help us understand and evaluate their climate

The full article is available here. This article was published at ESG Investor.